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#WISDOMWEDNESDAY WITH LOOP - JULY '24

July 30 2024

A Dose of Eco Wisdom Every Wednesday

☀️ Dear Loop fam, on this last Wednesday of July, here's a recap of our weekly 🧠 WISDOM WEDNESDAY🧩 posts for the month. We hope these will help you make informed purchasing decisions for the upcoming summer sales.

#WisdomWednesday 07.03

All through May and June, we talked a lot about how the exponential growth of fast fashion, online shopping, changed consumer preferences and business strategies all around the world have resulted in increased shares of discarded, returned, and unsold fashion waste.

For the first WISDOM WEDNESDAY of July we wanted to spotlight a government action in Europe that aims to combat the fashion industry’s waste problem with long-term systemic changes. After talks last year, the EU has issued a complete ban on the destruction of any textile and footwear waste. This ban will take hold for all big brands in two years and for medium and smaller brands in six years. This move is aimed at reducing waste, cracking down on the impact of 'fast fashion', and encouraging sustainability and circular economy practices within the industry.

Products destroyed by retailers, brands, or manufacturers even before they are ever used highlights the inefficiency of current linear production-consumption systems (see our graphic below to understand what a linear product cycle looks like). The EU's action, a part of Eco-design for Sustainable Products Regulation (ESPR), reflects a growing awareness and commitment to environmental conservation and responsible consumption.

The measure sets rules regarding substances that inhibit circularity, recycled content, remanufacturing, recycling, and environmental footprints. The regulation also mandates the inclusion of a Digital Product Passport (more on this below).

“It’s time to terminate the ‘take, make, dispose’ paradigm, which poses significant harm to our planet, health, and economy” – Alessandra Moretti, Member of the EU Parliament.

#WisdomWednesday 07.10

This WISDOM WEDNESDAY we took a closer look at the Digital Product Passport (DPP), a requirement of EU’s Eco-design for Sustainable Products Regulation (ESPR).

📱A DPP – most likely accessed by scanning a QR code, is a digital record that provides comprehensive information about a product and its entire value chain. This includes everything from the origin of the product, materials used, labor involved, environmental impact, performance, repair, resale, recycle and disposal recommendations.

The DPP’s main purpose is to close the gap between the transparency demanded by consumers and the current lack of reliable data on product journeys. The DPP will also help track unsold inventory that ends up in landfills and in holding brands accountable for, quite literally, producing trash. 🗑️

It demonstrates why government support is an absolute must for implementation of policies that force for-profit companies to clean up their acts. After all, even the food nutritional labels now commonplace were only implemented once governments around the globe made the health of their citizens a priority considering the rise of ultra-processed foods.

A Suggested Digital Product Passport (DPP) Design by Peter Gorse.

We at Loop also feel that the DPP shouldn’t just be a QR code that people ignore to scan just because their latest fashion purchase was “SUCH A GOOD DEAL!” We believe it is something that should be a physical tag, much like a food nutritional label, with as much of a preview as possible so consumers don't miss it. Peter Gorse, an industrial designer in England helped design one during the pandemic (see image above).

Read more about his label and the DPP in the link below:
https://www.voguebusiness.com/story/sustainability/show-me-the-ingredients-the-story-behind-fashions-first-nutrition-label

#WisdomWednesday 07.17

With our focus this month on EU’s ban on the destruction of unsold merchandise this WISDOM WEDNESDAY we shifted the conversation from big fast fashion brands to big luxury brands.

🇪🇺 EU is home to some of the world’s most coveted brands like LVMH, Gucci, Prada, Chanel…and while you might think it’s a luxury therefore it must be rare, think again. These iconic fashion firms face a paradox - to satisfy shareholders they must keep expanding and maximize production efficiency even if it risks overproduction. Yes, you read that right. It is more expensive to produce smaller quantities and luxury brands also overproduce.

🔥 While these brands are just as likely to contribute to waste, we may not see this end up in landfills around the world as they are far more likely to destroy their unsold inventory. The main reason behind this is that donating these items or even selling them on continuous discounts would impact the perceived value of their goods.

💶 According to a recent Business of Fashion (BoF) report, LVMH's unsold inventory rose to 3.2 BILLION EUROS in 2023 and this figure represents a mere 4% of their total revenue for the same period. There’s a reason why and how the head of LVMH, Bernard Arnault, surpassed Elon Musk as the richest man on the planet!

Another reason why government action like the ban that’s been our focus this month and the Digital Product Passport are all steps that enforce a better commitment to circularity and sustainability by ALL big brands.

#WisdomWednesday 07.24

As we unearth the real magnitude of unsold merchandise by brands (fast fashion and luxury), this WISDOM WEDNESDAY we wanted to talk more about a category of unsold merch that often dodges the spotlight - CONSUMER RETURNS.

While your initial reaction maybe - oh, what’s the big deal about returns? Brands can simply resell. Ummm…they might not! See below chart that shows what happens to returned items and the sizeable operation required to manage them.

🛜 In the early days of eCommerce, brands offered free returns to compete with brick-and-mortar retailers and it worked! Shoppers embraced this perk with open arms and still expect it today. 75% of returns in 2023 were for clothing and accessories as online shoppers are three times more likely to return their clothes as compared to people who shop in stores.

📦 The massive costs of return packaging, processing and transportation are easy to imagine, but what many don't realize is that majority of returned goods don't get resold at all. Often, it's cheaper for the seller (the likes of Temu and Shein) to simply throw the item away than to inspect the damage, repackage and resell.

💰 Apparel brand returns represent a $218 billion per year problem and this clothing either ends up in landfills or reaches the second-hand market with damaging (environmental) effects because of the sheer volume of it. For instance, in Ghana 15 million used/returned garments arrive every week.

👉🏽 What Brands Can Do:

Instead of chasing bottom-of-the-barrel supply chain options, produce things with care and seek fair value goods with longevity. Price product fairly to reflect this and then always opt to fix and clean items to restock them online and in stores.
Provide full support to customers and help them determine their size with accuracy through detailed size charts, fit notes, and customer care chats. This problem is already being helped a lot with the advent of AI.
No free returns or exchanges.
Store credit and exchanges only for returns.

That's it for 🧠WISDOM WEDNESDAY🧩 for July! Thank you for the enthusiatic response to our posts. We know that you align with our goal to reduce the impact of our consumption patterns by making better informed choices and we hope to help you with this - one #WisdomWednesday at a time. Please connect with us on Instagram @loopswim for weekly updates.